Is it possible to acquire rental property without much of your own money?
Hi,
I don’t have a lot of cash in the bank, but I have excellent credit. Is it possible to buy leasing property such as apartment buildings, duplexs, ect? If so, how?
If you be eligible for a mortgage, yes, it’s possible.
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Generally when purchasing leasing property , the bank will require a superior downpayment than title-holder full property. But, you may be able to reduce up front costs by increasing the hold price and negotiating with the seller to pay some up front costs.
It’s very possible to buy leasing property either by traditional financing ( your cash down payment + a traditional mortgage) or creative financing ( too many alternatives to list). You just need to choose what you want and then know where to find it.
Also banks and mortgage companies will usually loan different percentages based on several key factors:
The highest loan-to-value ratio (LTV) with excellent credit would be if you plot to live in the property and it has less than four units. The LTV’s usually descend from there.
Four or more units and you the title-holder don’t reside on the property, would be along the lower LTV’s. Requiring the most out-of-pocket deprivation.
For a fantastic deal of information on real estate investing try this website’s forums.
Fantastic question! Not only is it possible, that is the only way that I invest. I am a full time property investor, I do not flip houses, I invest for cash flow and long term equity. I usually buy property with 10% down, but I ALWAYS try to do it with 0% down first. For some reason, people in this forum like to place forth the proposition that 0% down investing either doesn’t exist or is a scam. I will give you an example of a contract that I wrote TODAY for a piece of property in Houston, TX. This property in not pricey, or huge, but in very excellent condition. It is a 3/2, about 1200 sq ft, and the price that the seller is asking is only $64,500. Zillow estimates that is it worth $84k and I believe that I can get $750/month in rent. So I make a full price place forward to the seller, I assure them that I am pre-approved for my loan and give them a recent letter from my lender to prove it. I then tell them that I will need them to carry 10% of the loan, or maybe I will tell them I want them to carry 20% and then settle for 15% in negotiation. I then question for them to contribute $1k towards closing costs in exchange for me overlooking the insignificant repairs that I have noticed the house needs. At the end of the day I will spend somewhere between $3k and $6k for an asset that after PITI (principle, appeal, taxes, insurance) will place about $150/month of free cash flow in my pocket. After I deduct the appeal and depreciate each last thing in the house I will realize about twice that in actual gains. So yeah, you can buy property with nothing or small down. And don’t let anyone tell you otherwise. When someone tells me “you can’t do that!” (and it happen often) I say, maybe YOU can’t, but I can.
You are asking the right questions, and that means that you have the guts to make it in this business, if you need any preside over advice at all, about anything, do not hesitate to email me. I will respond personally. Alqprop@gmail.com.
If you want a head start, go buy two books: Real Estate Riches, by Dolf de Roos. And Rich Dad, Poor Dad, by Robert Kiyosaki.
Excellent Luck!
C